HOLDING COURT -- Nightmare Vacation -- Hung Out to Dry by the Banks / A Berkeley woman had $10,000 in travelers' checks stolen from her suitcase -- only to be royally taken to the cleaners by the company that issued them . . .

Reynolds Holding

Published 4:00 am, Sunday, August 17, 1997

After hearing this story, I have only one question: Why the heck would anyone ever buy travelers' checks?

Janet Whang thought the answer was obvious when she walked into a Bank of America branch in Berkeley on June 14.

She had just graduated from the University of California and landed a job as an investment banker in New York City, and she figured she owed herself a treat on the way to financial glory in Gotham: a week in the Bahamas.

But Whang was no foolish youngster. She visited the bank that day to protect her spending money by purchasing travelers' checks.

You know, travelers' checks, as in: Don't leave home without them, because they will be replaced if lost or stolen. No exceptions, no excuses.

She ended up buying a lot of travelers' checks -- about $10,000 worth -- her entire savings. She'd been told that she would need cash not only for the Bahamas, but for the outrageous deposit some landlord would undoubtedly demand in the tight New York apartment market.

And the checks seemed the smartest way to go, because they were easy to convert to cash and were issued by Visa through Bank of America. What could be safer?

Anyhow, Whang packed the checks in her suitcase and headed for the airport. But when she arrived in the Bahamas, the checks were gone.

After a moment of panic, Whang did what she thought she was supposed to do to get her money back: report the theft and call Visa with the check numbers.

But Visa refused to help. It had licensed its name to a company called Interpayment Services Limited, and that company -- not Visa -- had issued the travelers' checks and was on the hook for any payments.

Miffed but not defeated, Whang called Interpayment. But after taking the information, Interpayment denied her claim.

The reason: She had been careless with the checks, the company said, and it did not have to reimburse careless customers.

Oh, that makes sense.

The whole purpose of buying travelers' checks is to protect against your own carelessness. You drop them into the ocean, you get them back. You leave them on top of a car, you get them back.

And you lose them to some thieving baggage handler who rifles through your luggage, you get them back.

Not necessarily, according to Interpayment's interpretation of the fine print on the back of Whang's receipt for her checks.

Similar language appears on travelers' checks issued by all the big companies. It says, in effect, that the issuer is not responsible for its customers' negligence in handling the checks.

Come on. What could negligence possibly mean when it comes to travelers' checks?

Alexis Cole, a spokeswoman for Thomas Cooke -- which owns Interpayment -- said she couldn't discuss Whang's case, but warned that "You have to take care of your travelers' checks. You have to make sure they're kept in a safe place."

And if you don't?

"That would be taken into consideration if a refund was claimed," she said.

I checked with American Express, too, and its spokeswoman -- Victoria Handwerk -- said the company also warns customers to treat the checks like cash.

"But not safeguarding them is not alone a reason to deny a claim," she said. "We might deny refunds if we got inconsistent or incomplete information about a loss."

OK, but let's be honest: The sole judge of inconsistencies or incompleteness or negligence is the company, so it's the company that decides whether your vacation is ruined.

And though these spokeswomen assured me that a refund denial would be bad for business and almost never happens, it happened to Whang -- under apparently suspicious circumstances.

Bank of America denies any responsibility, because it didn't decide whether to reimburse Whang -- although she claims it told her lost checks would be replaced without exception. Visa didn't even bother to return numerous calls for comment. And Cole says Thomas Cooke is now offering Whang a full refund -- about two months and exactly one denial and one lawsuit after the original claim.

But Whang's lawyer, Arnold Levinson, says the only offer he knows of would refund all but $1,000, which was the amount of checks recently cashed by someone in Miami. And under the deal, Whang would still have to admit that she was negligent.

In any case, Levinson says his client won't accept a full-refund offer "until we find out whether this is a fraudulent scheme and resolve the additional damages" for interest, phone calls and aggravation.

And then there's the principle of the matter, the whole issue of what you're getting when companies take your money -- plus a substantial fee -- in exchange for travelers' checks.

Cole says you're getting "one of the safest ways to travel with money."

Levinson is not so sure.

"If they're not going to pay you if you're negligent, then why would you purchase them in the first place?" he asks. "Why not just use cash?"